For the last several months I've been involved in a project called RootsWire.   The project was initially started as a means to pull together content from the different blogs and web sites covering the Democratic Convention in Denver.   We are growing (at least conceptually) in scope to be an aggregation and cooperation site for bloggers and hyperlocal sites across the US.

Our intention is to build tools for sharing of content between sites in geographic areas, and to have local editors throughout the country who will build a human-edited daily digest of news generated by grassroots sites and organizations.  

Our site http://www.rootswire.org contains the archives of our coverage of the Democratic Convention, and the beginnings of a Wisconsin RootsWire.   We are in the process of building a firmer proposal and seeking funding to continue the project.

One of the more exciting features of this is that we are building relationships not only with grassroots bloggers and local sites, but also with mainstream media outlets.   Our plan is to cross-pollinate news between the RootsWire sites and the more traditional media outlets.